Reintroduction of mortgage interest relief will be an option considered during ministerial deliberations on the Budget, Paschal Donohoe has said.
The Minister for Public Expenditure said he appreciated the pressure many mortgage holders were facing after a series of interest rate hikes.
Mr Donohoe made clear that the final decision on the shape of Budget 2024 would not be made until closer to the day itself in October.
He would also not be drawn on whether a cut to the Universal Social Charge would be included.
“The cost of living and all the factors that are feeding into the cost of living will be the key theme of the budget,” Mr Donohoe told reporters in Dublin.
“We’re aware that due to the increase in interest rates that have taken place over the last year it’s had such a dramatic effect on the living standards of mortgage holders.
“And these increases are coming at a time in which inflation continues to go up and prices continue to be high.
“Any decisions in relation to mortgage interest relief are going to be decisions that are going to be taken on Budget day itself.
“It’s not possible for me to comment on that until we get to the Budget and the decisions are made. But I well appreciate the pressures that those who have mortgages are facing at the moment who are seeing interest rates going up.
“As one of the two ministers that will be involved in drafting the Budget, it’s an issue that will have to be discussed with the Minister for Finance (Michael McGrath) and with other party leaders.
“We’ve already acknowledged anybody who faces real extreme difficulty, or is a risk of losing their home due to change in interest rates, of course, the Government will look at measures that are in place and anything else that we can do to support such homeowners. But anything beyond that, it’s a Budget day decision.”
On a potential move on USC, Mr Donohoe added: “Changes in Universal Social Charge have been made in many recent budgets.
“Because USC is a tax that is paid on lower levels of income, it is one of the few income taxes that you can change that will benefit those who pay tax but pay tax on low income. But all of these are decisions that will be considered in the context of the budget.
“The Minister for Finance will bring forward recommendations to the party leaders and to cabinet and the matter will be decided more closely to the Budget.
“But the really important thing which I welcome is this acknowledgement that tax changes can play a role in helping with the cost of living. I’ve made this point over a number of years, as has the now Taoiseach, that changes in taxation can help at a time of inflation, and particularly for groups of workers that don’t benefit from additional support from the state but do pay tax.
“Careful changes in relation to the level of tax that they pay can be a help and it can be a big help. And in any event, the resources are set aside already in the summer economic statement to be able to do this.”
The USC was introduced in 2010 amid the fallout from the financial crisis.
Mr Donohoe’s Fine Gael party has previously pledged to abolish the charge.
He joined minister of state Joe O’Brien in Dublin on Tuesday afternoon to launch the Social Inclusion and Community Activation Programme (SICAP) annual report 2022 at the LAB Gallery.
SICAP employs around 600 community workers across Ireland to reduce poverty and promote social inclusion and equality through local engagement and partnerships between disadvantaged individuals, community organisations and public sector agencies.